‘There’s Not a Business Case’: Lack of Parity Hinders Transition to Value-Based Care

Value-based care and parity go hand-in-hand as the behavioral health industry continues to evolve beyond the fee-for-service paradigm.

The interrelatedness of the two concepts often means that progress on one indirectly impacts the other. Moving toward either comes with several hurdles that require cash to fuel efforts to surmount them.

Where things stand now, patients and providers bear the burden of bringing behavioral health to value-based care. Adding insult to injury, many of the required investments to achieve either value-based care or parity come with significant capital and time investments and no way to get paid for being innovative.

“Whether it’s parity, whether it’s the history of not getting electronic health record incentives … that have put behavioral health behind the medical side,” Lauren Conaboy, vice president of national policy at multi-state behavioral health and human services nonprofit Centerstone, said during a panel discussion during VALUE 2024 in Miami, “We need to level up to a point where the industry has a more fiscally healthy starting point and foundation to move into the value-based care world, whether that’s parity, or whether that’s other policy mechanisms.”

Data from the 2019 Milliman study found that physical health care providers are paid between 17% and 24% on average more for office visits relative to the Medicare Physician Fee Schedule compared to behavioral health providers. 

Federal regulations have sought to push parity, which is already law, into reality. The Biden administration is set to release final rules on parity enforcement at some point in 2024. It’s been over 170 days since the extended proposal period for the rule ended.

In the courts, several legal cases have challenged payer behavior that providers and patients contend violates federal laws not directly tied to the parity law — which lacks a mechanism for suing health plans — but these cases deal with parity-like questions of just treatment. However, one circuit court has established a test that clarifies how plaintiffs could present parity-related cases.

Until there is something that resolves the tension between concepts of parity, systemic problems will persist and innovations will be stymied because the incentives across payers, providers and regulators are at cross-purposes, Bragg Hemme, an attorney and the behavioral health co-chair of the law firm Polsinelli, said at the panel.

“We’re in this space where we’re focused on how to decrease care costs by denying care,” Hemme said. “That’s not working in the courts of law; it’s not working from a parity standpoint. I assume it’s not working from a provider standpoint or family standpoint.”

She added that the burden of the requisite investment is on behavioral health providers and, therefore, shared by patients. It will take substantial investments that only payers and governments can provide over time to create the needed infrastructure for value-based care.

At the micro-level, asking providers to foot the bill for potentially expensive technology or services to track care outcomes with no assurance of commensurate compensation is an unrealistic expectation, Carrie Singer, CEO of Quince Orchard Psychotherapy, said during the panel.

“It didn’t feel fair to put the onus on the patient and on the practice when the margins are already razor thin,” Singer said. “There is no cash flow to invest in these tools, hoping that later on we might qualify for some kind of incentive-based payment.”

Quince Orchard Psychotherapy is an outpatient mental health provider based in Fredrick, Maryland, that employs over 40 clinicians and operates in two offices. The company announced that it landed an investment from the Graham Family Office in May 2023.

“If payers want the outcomes, they should facilitate outcome delivery,” Singer said.

While the collective payer system has billing codes to acknowledge measurement-based care, or as some prefer, measurement-informed care, the payer system is not willing to pay for these efforts in the current fee-for-services paradigm.

Conaboy said Centerstone used a federal grant to study its reimbursement effort in measurement-based care. In a pilot study, it billed 550 claims with add-on codes for measurement-based care. Only 5% of those claims were paid out, and those were only brought in between $1 and $5.

“From our perspective, there’s not a business case,” Conaboy said. “Our multi-state status allows us to leverage federal grants to finance this. We are going into it and we’re saying the business case, for us, is the mission — that we want to deliver the highest quality of care possible to our patients.”

These challenges are acutely challenging for startups that seek to build the next generation of behavioral health organizations. The time burden of waiting for the industry to come to some kind of harmonization on value-based care could be fatal. If achieved, that may bring something that looks like parity into the behavioral health industry. But that work must be done by the largest stakeholders in the industry, Julia Bernstein, COO of the virtual mental health company Brightside Health, said at the panel.

“For an early-stage company, time is money,” Bernstein said. “You’re on the backfoot trying to work through what the claims data are so that I can make a case for a performance-based contract.

“I think there’s a lot of onus we can put on the payers, the associations to think about how we standardize this process, so that we’re making it easier and more seamless for folks to get the type of contracts that we’re talking about.”